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Alibaba IPO leads to ejection order from Taiwan

The Chinese e-commerce company has been turned out of Taiwan after six years of operating in the country.

Alibaba co-founder Jack Ma Screenshot by Donna Tam/CNET

Taiwan's Ministry of Economic Affairs has ordered Alibaba Group out of the country, claiming that the Chinese e-commerce giant violated investment rules that Chinese companies are expected to adhere to when in Taiwanese territory, Reuters has reported.

Alibaba has been operating in Taiwan since 2008, offering business-to-business services and managing Taobao.com, a popular online shopping site. Alibaba will now be forced to withdraw or transfer its Taiwanese holdings within the next six months.

The company initially established itself in Taiwan through the Singapore-based Alibaba.com Singapore E-commerce Private Ltd., a move that Alibaba claims was in accordance with regulations at the time., according to Reuters. However, following Alibaba's IPO last year, Taiwanese authorities apparently found evidence of Chinese control of the company. Mainland Chinese companies are subject to far stricter regulations in Taiwan than other foreign companies.

"Since Alibaba Group, the parent company of Alibaba.com, went public in the United States last September, the authority took a different view about the internal structure of Alibaba Group and deemed it as a mainland Chinese company," Alibaba said in a statement.

Alibaba Group was told to provide business information to Taiwan at the request of the government -- or face expulsion within six months, Reuters reported. Chairman Jack Ma noted that his company "fully understood the requests that Taiwan has made this time." Taiwanese regulators allege that Alibaba did not provide necessary documents that should shed light on their shareholding structure since September, Business Insider reported. For their troubles, the giant Chinese e-commerce company also faced a NT$120,000 ($3,807) fine.

"Taiwan is very important for Alibaba," Ma told reporters, according to Bloomberg. The company employs around 100 people in Taiwan and has 140,000 registered users in the market. The order from the Taiwanese government came on the same day the company disclosed an NT$10 billion ($317 million) investment fund for Taiwanese start-ups, according to the South China Morning Post.